Problem 5-4

(Retirement of a Partner under

Various Cases)
PROBLEM:
 On January 1, 2014, Dancel decided to retire
from the partnership of Daet, Dais, and
Dancel, who share profits and loses in the ratio
of 3:2:1, respectively. The condensed
statement of financial position shown on the
next page presents the account balances
immediately before and, for seven
independent cases, after Dancel’s retirement.

INSTRUCTIONS:
 Prepare the necessary journal entries to record
the retirement of Dancel from the partnership
for each of the seven independent cases.
 CASE 1:
Balances prior to Balances after
Accounts
Dancel’s Retirement Dancel’s Retirement
Assets

Cash P 200,000 P 40,000 = 160,000

Other Assets 400,000 400,000
Total Assets P 600,000 P 440,000
Liabilities and Capital
Liabilities P 120,000 P 120,000
Daet, Capital 160,000 148,000 = 12,000
Dais, Capital 180,000 172,000 = 8,000
Dancel, Capital 140,000 -0- = 140,000
Total Liabilities and Capital P 600,000 P 440,000

JOURNAL ENTRIES:

Daet, Capital 12,000

Dais, Capital 8,000
Dancel Capital 140,000
Cash 160,000
 CASE 2:
Balances prior to Balances after
Accounts
Dancel’s Retirement Dancel’s Retirement
Assets

Cash P 200,000 P 200,000

Other Assets 400,000 400,000
Total Assets P 600,000 P 600,000
Liabilities and Capital
Liabilities P 120,000 P 120,000
Daet, Capital 160,000 300,000 = (140,000)
Dais, Capital 180,000 180,000
Dancel, Capital 140,000 -0- = 140,000
Total Liabilities and Capital P 600,000 P 600,000

JOURNAL ENTRIES:

Dancel, Capital 140,000

Daet, Capital 140,000
 CASE 3:
Balances prior to Balances after
Accounts
Dancel’s Retirement Dancel’s Retirement
Assets

Cash P 200,000 P 70,000 = 130,000

Other Assets 400,000 400,000
Total Assets P 600,000 P 470,000
Liabilities and Capital
Liabilities P 120,000 P 120,000
Daet, Capital 160,000 166,000 = (6,000)
Dais, Capital 180,000 184,000 = (4,000)
Dancel, Capital 140,000 -0- = 140,000
Total Liabilities and Capital P 600,000 P 470,000

JOURNAL ENTRIES:

Dancel, Capital 140,000

Cash 130,000
Daet, Capital 6,000
Dais, Capital 4,000
 CASE 4:
Balances prior to Balances after
Accounts
Dancel’s Retirement Dancel’s Retirement
Assets

Cash P 200,000 P 32,000 = 168,000

Other Assets 400,000 468,000 = (68,000)
Total Assets P 600,000 P 500,000
Liabilities and Capital
Liabilities P 120,000 P 120,000
Daet, Capital 160,000 184,000 = (24,000)
Dais, Capital 180,000 196,000 = (16,000)
Dancel, Capital 140,000 -0- = 140,000
Delia, Capital -0- -0-
Total Liabilities and Capital P 600,000 P 500,000

JOURNAL ENTRIES:
Other Assets 68,000
Dancel, Capital 140,000
Cash 168,000
Daet, Capital 24,000
Dais, Capital 16,000
 CASE 5:
Balances prior to Balances after
Accounts
Dancel’s Retirement Dancel’s Retirement
Assets

Cash P 200,000 P 120,000 = 80,000

Other Assets 400,000 440,000 = (40,000)
Total Assets P 600,000 P 560,000
Liabilities and Capital
Liabilities P 120,000 P 120,000
Daet, Capital 160,000 220,000 = (60,000)
Dais, Capital 180,000 220,000 = (40,000)
Dancel, Capital 140,000 -0- = 140,000
Delia, Capital -0- -0-
Total Liabilities and Capital P 600,000 P 560,000

JOURNAL ENTRIES:
Other Assets 40,000
Dancel, Capital 140,000
Cash 80,000
Daet, Capital 60,000
Dais, Capital 40,000
 CASE 6:
Balances prior to Balances after
Accounts
Dancel’s Retirement Dancel’s Retirement
Assets

Cash P 200,000 P 200,000

Other Assets 400,000 400,000
Total Assets P 600,000 P 600,000
Liabilities and Capital
Liabilities P 120,000 P 120,000
Daet, Capital 160,000 160,000
Dais, Capital 180,000 320,000 = (140,000)
Dancel, Capital 140,000 -0- = 140,000
Delia, Capital -0- -0-
Total Liabilities and Capital P 600,000 P 600,000

JOURNAL ENTRIES:

Dancel, Capital 140,000

Dais, Capital 140,000
 CASE 7:
Balances prior to Balances after
Accounts
Dancel’s Retirement Dancel’s Retirement
Assets

Cash P 200,000 P 200,000

Other Assets 400,000 400,000
Total Assets P 600,000 P 600,000
Liabilities and Capital
Liabilities P 120,000 P 120,000
Daet, Capital 160,000 160,000
Dais, Capital 180,000 180,000
Dancel, Capital 140,000 -0- = 140,000
Delia, Capital -0- 140,000 = (140,000)
Total Liabilities and Capital P 600,000 P 600,000

JOURNAL ENTRIES:

Dancel, Capital 140,000

Delia, Capital 140,000